Kent Conrad

Mr. CONRAD

Mr. CONRAD. Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 10 a.m. on Tuesday, September 13; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, and the time for the two leaders be reserved for their use later in the day; that following any leader remarks, the Senate be in a period of morning business for 1 hour, with Senators permitted to speak therein for up to 10 minutes each, with the time equally divided and controlled between the two leaders or their designees, with the majority controlling the first half and the Republicans controlling the final half; that following morning business, the Senate resume consideration of the motion to proceed to H.J. Res 66, the joint resolution regarding Burma sanctions and the expected legislative vehicle for additional FEMA funds; further, that the Senate recess from 12:30 until 2:15 p.m. to allow for the weekly caucus meetings; finally, that if cloture is invoked on the motion to proceed to H.J. Res. 66, all time during adjournment, morning business, and recess count postcloture and, if cloture is not invoked, a motion to reconsider be considered entered.

Mr. CONRAD

Mr. CONRAD. Mr. President, if there is no business to come before the Senate, I ask unanimous consent that it adjourn under the previous order at the conclusion of the cloture vote on the motion to proceed to H.J. Res. 66.

Mr. CONRAD. I suggest the absence of a quorum.

Mr. CONRAD

Mr. CONRAD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. CONRAD

Mr. CONRAD. Mr. President, section 106 of the Budget Control Act of 2011 provides for budget enforcement in the Senate for the remainder of the current year, 2011, for the upcoming budget year, 2012, and, if necessary, for fiscal year 2013. Section 106(b)(1) requires the chairman of the Budget Committee to file: (1) allocations for fiscal years 2011 and 2012 for the Committee on Appropriations; (2) allocations for fiscal years 2011, 2012, 2012 through 2016, and 2012 through 2021 for committees other than the Committee on Appropriations; (3) aggregate spending levels for fiscal years 2011 and 2012; (4) aggregate revenue levels for fiscal years 2011, 2012, 2012 through 2016, and 2012 through 2021; and (5) aggregate outlay and revenue levels for fiscal years 2011, 2012, 2012 through 2016, and 2012 through 2021 for Social Security. In the case of the Committee on Appropriations, the allocations for 2011 and 2012 shall be set consistent with the discretionary spending limits set forth in the Budget Control Act. In the case of allocations for committees other than the Committee on Appropriations and the revenue and Social Security aggregates, the levels shall be set consistent with the Congressional Budget Office's March 2011 baseline adjusted to account for the budgetary effects of legislation enacted prior to and including the Budget Control Act but not included in the March 2011 baseline. In the case of the spending aggregates for 2011 and 2012, the levels shall be set consistent with the Congressional Budget Office's March 2011 baseline adjusted to account for the budgetary effects of legislation enacted prior to and including the Budget Control Act but not included in the March 2011 baseline and the discretionary spending limits set forth in the Budget Control Act. In addition, section 106(c)(1) requires the chairman of the Budget Committee to reset the Senate pay-as-you-go scorecard to zero for all fiscal years and to notify the Senate of this action. I ask unanimous consent that the following tables detailing the new committee allocations, budgetary and Social Security aggregates, and pay-as-you-go scorecard that I am making pursuant to section 106 of the Budget Control Act of 2011 be printed in the Record.

Mr. CONRAD

Mr. CONRAD. Mr. President, I think it is absolutely correct that the flexibility exists for the Joint Committee to determine the benchmark it wishes to use and that such flexibility is entirely appropriate given the circumstances. The leader mentioned three bipartisan groups that came to a similar conclusion. I was a member of two of those groups, the President's Fiscal Commission and the so-called Group of 6. We devoted considerable time to considering the most appropriate baseline to use in our deliberations given our goals. In both cases, on a bipartisan basis, we decided what made the most sense was not a standard current law baseline, as CBO normally uses for the work we do around here, but a baseline that was adjusted for more realistic policies, such as more realistic war costs, more realistic tax policies, and more realistic health spending given the need to regularly provide the so-called doc fix. I can tell the leader that having that flexibility was critical to both groups reaching completion of its work. The joint committee should have that same flexibility, and I believe the bill provides it.

Mr. CONRAD. Mr. President, debate over the fiscal future of our Nation has been at the center of the 112th Congress. With the passage today of the Budget Control Act of 2011, we have avoided a default on our national debt, we have made a significant downpayment on our deficit, and we are establishing a Joint Select Committee that provides a real opportunity to achieve even greater deficit reduction by the end of this year. As chairman of the Senate Budget Committee, I am privileged to have a staff of dedicated professionals who advise me on the complicated budget issues that have been before this body. My staff also shares its expertise with Members on both sides of the aisle. They are a credit to the Senate, and I would like to take this opportunity to thank them for their hard work during the session. Budget Committee staff director Mary Naylor deserves particular credit for putting together a team that regularly provides thorough and accurate analysis, often on incredibly short notice. Deputy staff director John Righter also deserves a special mention. Mr. Righter's mastery of baselines and scoring has been invaluable as we have developed and compared various plans to address our long-term fiscal issues. Deputy staff director Joel Friedman and committee chief counsel Joe Gaeta have also played a critical role in the committee's work this session. The committee has a dedicated communications staff, including Stu Nagurka, Steve Posner, Adam Hughes, and Kobye Noel, that ensures that the committee's analysis is made available to Members and the general public in a clear, concise, and timely manner. In addition, committee analysts Steve Bailey, Jeannie Biniek, Amy Edwards, Jennifer Hanson- Kilbride, Robyn Hiestand, Mike Jones, Sarah Kuehl Egge, Matthew Levy, Jim Miller, Matt Mohning, Michael Obeiter, Miles Patrie, and Brandon Teachout each have expertise in specific policy areas that has proven invaluable to me as the committee has reviewed every aspect of the Federal budget. The committee's support staff and staff assistants, Anne Page, Josh Ryan, Ben Soskin, and Ronald Storhaug have worked late nights and weekends to make sure we all meet the demands placed on us. And finally, I would like to recognize committee's chief clerk Lynne Seymour and administrative staffers George Woodall, Letitia Fletcher, Cathey Dugan, and Kathleen Llewellyn-Butts, who provide support to both sides of the Budget Committee. We as Senators place incredible demands on our staff, and they deserve to have their service to this institution and our country recognized. As we move to the next chapter of our debate over the federal budget, I offer my most sincere appreciation for their hard work.

Mr. CONRAD

Mr. CONRAD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. CONRAD. Mr. President, I rise to discuss the agreement that has been reached between the leaders in the Senate, the House Republicans and Democrats, and the President of the United States with respect to an extension of the debt limit and certain deficit reduction steps to be taken in conjunction with that action. I wish to remind my colleagues that if we fail to act, most economists believe we will face an interest rate spike. For every 1 percentage point increase in interest rates, we would add $1.3 trillion to deficits and debt over 10 years. If there was only a 200-basis point increase, that would wipe out all the deficit reduction that is in this package. Colleagues need to keep in mind the consequences of our actions and how critically important it is to prevent that interest rate spike. In addition, David Beers at Standard & Poor's, global head of Sovereign Ratings, made a statement in an interview on CNBC on July 26. The chart is headlined, ``To avoid a U.S. credit rating downgrade, S&P wants to see a bipartisan debt reduction effort.'' He said this, specifically: We will measure this matter on a number of parameters. One is, is it credible? And credibility, among other things, means to us that there has to be some buy-in across the political divide, across both parties, because politics can and will change going forward. And if there's ownership by both sides of the program, then that would give us more confidence. . . . It is not just about the number. It is about the all-in intent. However imperfect this agreement is--and it is imperfect because, after all, it is a work of the hands of men. We are all imperfect. But it is critically important. It is important to demonstrate that we can work together to achieve a result. This package contains these elements: First, it prevents a default. It saves the Nation from immediate economic crisis. It creates a process to allow a debt ceiling increase to 2013, so we don't have to reenact this entire episode in just a matter of months. It provides a $900 billion downpayment on deficit reduction that is enforced with 10 years of spending caps. It creates a joint select committee of Congress on deficit reduction, tasked with finding an additional $1.5 trillion in savings and to bring us a report before Thanksgiving. This select committee has a goal of $1.5 trillion in savings as a floor; it is not a ceiling. This committee could come back to us with an even more ambitious, more bold proposal to get our fiscal affairs in order. Let us hope that it is so. The overall package that is before us--or about to be before us-- requires a vote on a balanced budget amendment. The debt ceiling increase is not contingent on its passage, but there is a requirement to give colleagues in both Chambers an opportunity to vote. It also protects Pell grants from deep near-term cuts. I think most of us understand how important Pell grants are to providing opportunities to young, talented people all across America to improve themselves through higher education. I was raised by my grandparents. My grandmother was a schoolteacher. We called her ``little chief,'' because she was only 5 feet tall. But she commanded respect. She commanded respect because she had character, and she told people in our family there are three priorities in this household: No. 1 is education. No. 2 is education. No. 3 is education. We got the message. I can remember, fondly, her telling us over and over: What you put in your head no one can take away. They can take your property, they can take your wealth, but one thing nobody can take from you is what you have done to improve your mind. That ought to be something that is taught in every household in our country because it is central to America continuing to be a world leader. The proposal that will be before us also creates a joint select committee on deficit reduction. As I have indicated, they have a goal of finding an additional $1\1/2\ trillion in savings, but they are not limited to that level of savings. They could do more. It is bipartisan and bicameral, 12 Members--6 Democrats, 6 Republicans. Congress is to have a report by Thanksgiving on their work. No amendments are allowed and a simple majority vote to pass in the Senate and the House. This closely follows the recommendation of Senator Gregg and myself from 5 years ago to create a commission empowered to bring to a vote in the Senate and the House a plan to get our debt under control and to do it so we wouldn't have the endless process our current situation requires. The idea was to create a BRAC-like system, so a proposal could come before the Senate and the House to get our debt down. It is modeled, in many ways, after the reconciliation process that was designed for deficit reduction and only requires a simple majority vote. There is a fail-safe if this committee fails to produce a result. The fail-safe is across-the-board cuts in defense and nondefense spending, with exemptions for Social Security, veterans and low-income people and it limits the Medicare reductions to 2 percent. I would prefer the Medicare reduction not be there because there is no revenue that is assured in this plan. But we do have to have a fail-safe. We do have to have some assurance that savings are actually realized, and this mechanism does that. I think all of us know our current status finds us borrowing 40 cents of every $1 we spend. In fact, we are in a condition in which the United States is borrowing more than we have ever borrowed before as a share of our national income. The nonpartisan Congressional Budget Office has told us the long-term outlook is even more sober; that we have a debt held by the public that is about 70 percent now. Right here--the debt held by the public is at about 70 percent. Our gross debt is actually approaching 100 percent, but our publicly held debt-- that is debt held by the public, not counting what we owe to trust funds such as Social Security--is about 70 percent. But look where we are headed if we stay on our current course. The Congressional Budget Office tells us by 2037 our publicly held debt will be 200 percent of our gross domestic product if we fail to act. How did we get into this circumstance? This says it very clearly and very well. The red line is the spending line of the United States and the green line is the revenue line going back 60 years. What we can see is the red line--the spending line--is the highest it has ever been. Twenty-four percent of gross domestic product is Federal spending. The revenue line is the lowest it has ever been in that period--the lowest it has been in 60 years. Some of our friends on the other side say we just have a spending problem. They have it half right. We do have a spending problem. Spending is almost the highest it has been in 60 years. But we also have a revenue problem because revenue is the lowest it has been in 60 years as a share of our national income. That is a fact. So we have to work both sides of this equation. If we go back and reconstruct how we got into this ditch, a story on May 1, 2011, in the Washington Post, is instructive. This is what they found: The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former President George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That's nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years. This buttresses and confirms the point I just made. In addition, if one examines our history going back to 1969 and looks at the five times we have balanced the budget, in each of those times, revenue was almost 20 percent of GDP. Right now--remember what I just said--revenue is 14.8 percent of GDP. The five times since 1969 we have balanced the budget, revenue was 19.7 percent of GDP in 1969; in 1998, it was 19.9 percent; in 1999, it was 19.8 percent; in 2000, it was 20.6 percent; and in 2001, it was 19.5 percent. By the way, all these budgets--these last four--were the responsibility of Bill Clinton. Bill Clinton not only balanced the budget, he stopped using Social Security funds to finance other government operations, and he did it with the longest period of uninterrupted growth in our Nation's history and created 23 million jobs. The Clinton administration record on deficits, on debt, on economic growth, and job creation is the best, by far, of all modern Presidents. Facts are stubborn things. We have a Tax Code that is riddled with tax expenditures. It is riddled with tax expenditures. We are losing to the Treasury $1.1 trillion a year to tax expenditures--tax preferences, tax loopholes, tax deductions, tax exclusions. Guess who gets most of the benefit. Twenty-six percent of the benefit goes to the top 1 percent of those tax expenditures--those tax loopholes, those tax preferences. Here is a quote from one of the most conservative economists in America--Martin Feldstein, professor of economics at Harvard, Chairman of the Council of Economic Advisers under President Reagan. This is what he said about tax expenditures on July 20 of last year. Cutting tax expenditures is really the best way to reduce government spending. Eliminating tax expenditures does not increase marginal tax rates or reduce the reward for saving, investment or risk taking. It would also increase overall economic efficiency by removing incentives that distort private spending decisions. And eliminating or consolidating the large number of overlapping tax-based subsidies would also greatly simplify tax filing. In short, cutting tax expenditures is not at all like other ways of raising revenue. That is precisely why the fiscal commission and the Group of 6--both groups I was proud to participate in--chose the reduction of tax expenditures as one way of reforming the tax system, improving the competitive position of the United States, and raising revenue to help reduce this debt threat. Anybody who wonders what is happening with respect to loopholes-- exclusions, deductions, preferences in the Tax Code--doesn't have to go any further than this picture I have shown many times. This little five-story building--Ugland House, down in the Cayman Islands--claims to be the home of 18,857 companies. What an amazing building that is. This little building, the home to 18,000 companies. They all say they are doing business out of this building. Anybody believe that? They are not doing business out of that building. They are doing monkey business, and the monkey business they are doing is to avoid paying the taxes all the rest of us pay because the Cayman Islands is a tax haven. They do not impose taxes on these companies. Guess what these companies do. They file returns that show-- miraculously--the profits from all their operations across the United States don't show up in the United States. They show up in this little five-story building down in the Cayman Islands. They say that is where the profits are being realized. What a blessing that is because the Cayman Islands do not impose any taxes on the profits that show up in the subsidiaries of the companies that are doing business all over the world. Anybody who wonders if this is costing all the rest of us huge amounts of money, here is what our Permanent Subcommittee on Investigations found in a report in 2007. Experts have estimated the total loss to the Treasury from offshore tax evasion alone approaches $100 billion per year. Let me repeat that--$100 billion a year. If there is any doubt about this, go home and Google tax havens. See what you find. I think you will be quite startled by what you see. Continuing the quote from the report: Those losses include $40 to $70 billion from individuals, and another $30 billion from corporations engaging in offshore tax evasion. Abusive tax shelters add tens of billions of dollars more. My family and I, we pay what we owe. The vast majority of people in this country pay what they owe. We have a few people--unfortunately, it is a growing number and they tend to be people with much greater resources--who are not paying what they owe. We shouldn't permit it. That should come to a screeching halt. The bipartisan groups proposing comprehensive and balanced plans with spending cuts and new revenue include the fiscal commission, the Bipartisan Policy Center, and the Group of 6. These are the only bipartisan plans that have come from anywhere, and all of them recommended a balance between spending cuts and revenue. Almost all of them focused on reducing tax expenditures--the loopholes, the exclusions, the preferences, the tax havens--in order to raise revenue, to reduce rates, and make America more competitive but also to raise additional revenue to dump this debt. The other day there was a spirited debate on the floor between the senior Senator from Arizona and the senior Senator from Illinois. I arrived at the end of that debate and didn't have a chance to participate. There were a number of assertions made there by my friend, Senator McCain, and I wish to set the record straight. If we look at the records of Reagan, Bush 41, Bush 43, and Clinton, with respect to deficits, the record is very clear. Here it is: During the Reagan administration, deficits exploded, and we can see on the graph the deficits that averaged about $200 billion a year. During the first Bush administration, the deficits actually got worse and ended up still in the range of $200 billion a year. President Clinton inherited deficits of $200 billion a year, but we can see by the last 4 years of his administration, he was in the black. The budgets were balanced, and for 2 or 3 of those years, he actually stopped using Social Security money to fund government operations. Then, of course, we see what happened in the second Bush administration: Deficits absolutely exploded--absolutely exploded. The second Bush administration was, by far, the worst on record for deficits and debt of any of these administrations; and, by far, the best was the Clinton administration. But we can look at it a different way. This chart shows, in dollar terms, what happened to the debt. We can see in the Reagan administration the debt more than doubled. The Bush administration took it up much further. The Clinton administration actually started bringing down the debt. President Clinton was actually paying off debt during his administration. Then we saw what happened in the second Bush administration: The debt absolutely skyrocketed, going up well over 2\1/2\ times. Mr. President, when we then look at the record of economic growth under those different Presidents, it is very interesting. Reagan, who more than doubled the debt, had a pretty good record of economic growth--3.5 percent. Bush 1, who ran the debt up even further, had a pretty paltry record--2.1 percent economic growth. Clinton, who actually paid down debt, had the best record of economic growth--3.8 percent on average. Bush 2, who put in place the massive tax cuts that ballooned the deficits into debt, had the worst record of economic growth, averaging 1.6 percent. Let's connect the dots. There was a big increase in debt during the Reagan administration but pretty good economic growth; he took the No. 2 spot. Bush 1: massive increase in deficits and debt, and economic growth faltered. The Clinton administration has by far the best record on deficits and debt and also the best record of economic growth. Bush 2, who had huge tax cuts never offset by an adjustment, as Reagan did, had the worst record of economic growth. Finally, on job creation, during the Reagan administration, 16 million jobs were created--quite a strong record of job creation during his 8 years. During the first Bush administration, only 3 million jobs were created. During the Clinton administration--by far the winner on the jobs derby--23 million jobs were created, and he had the best record of deficit and debt reduction and the best record on economic growth. Do you know what. He raised taxes and cut spending. Wow. Our friends on the other side said, when President Clinton raised taxes and cut spending, it would crater the economy. I was here. I heard the majority leader on that side say that proposal would crater the economy. Republicans repeated that line all across America. The Clinton plan to get the deficits and debt down by raising revenue and cutting spending, they all said, would crater the economy. They were wrong. Then it came time for the Bush administration, and he had massive tax cuts, and they all said that would be a huge job creator and fire up the engines of economic growth. They were wrong again. The record is clear. Look at the difference. There were 16 million jobs created under Reagan, 3 million under Bush 1, 23 million under Clinton, and 3 million under Bush 2. Clinton had the biggest reductions in deficits and debt by far of any of them. He had the best economic growth, and he had the best job creation. And the second Bush administration comes and they say big tax cuts--that is going to fire up economic growth, that is going to fire up job creation. They were wrong. When Clinton had a proposal to raise revenue and cut spending, they said it would crater the economy. Yet Clinton had the best record on economic growth and the best record on job creation. They were wrong again. During the second Bush administration, at the end--has everybody forgotten?--we were on the brink of financial collapse. I was called to a special meeting in this building with the Bush administration's Secretary of Treasury, and I, along with other leaders of the House and Senate, was told we were days away from a financial collapse. This idea that you can't raise revenue or it will kill jobs, you can't cut spending or it will kill jobs has not proven to be right. In the real world, the Clinton administration raised revenue, cut spending to get our debt under control, and they had the strongest record of job creation, the strongest record of economic growth of any of the four Presidents during that period by far. I would just say I wish I could have participated in that debate last night. I missed it, but I wanted to set the record straight. I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry be authorized to meet during the session of the Senate on August 1, 2011.

Mr. CONRAD. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on August 1, 2011, at 3:30 p.m.

Mr. CONRAD

Mr. CONRAD. Mr. President, we are now reaching a critical hour in the Congress of the United States on the question of extending the debt limit of the Nation and of fundamentally dealing with the debt of the Nation. I don't think there is any serious person in either body who does not understand that we must deal with the debt itself as we extend the debt limit. We are borrowing 40 cents of every dollar we spend. The gross debt of the United States will reach 100 percent of our GDP by the end of this year. The best economists in the country, of whatever philosophical stripe, are telling us we are on an unsustainable course that must be changed. Mr. President, in the midst of this, we have had the House so far unable to send us a package. Now, we are told they do have the votes because they have added a balanced budget amendment to the Constitution as part of their package. The balanced budget amendment they previously proposed in the House of Representatives can never pass the Senate--at least as this body is currently constituted--and it should not pass this body. It is deeply flawed. To attach that to a measure that has to pass both Houses before Tuesday of next week, frankly, is an indication of a lack of seriousness on the part of our colleagues in the House of Representatives. Ultimately, there has to be a bipartisan agreement. Our friends in the other party control the House of Representatives, the Senate is controlled by my party, the Democratic Party, and we have a Democrat in the White House. No serious person can fail to understand that putting an amendment to the Constitution of the United States that is deeply flawed into that package absolutely guarantees it cannot pass in this Chamber. That would take a two-thirds vote. I don't believe it would even command a simple majority here, much less a two-thirds vote. So here we are at the eleventh hour, and people in the other body seemingly are still not serious about coping with the challenge of both extending the debt limit to avoid a default, which would be catastrophic, and dealing with the debt itself. I understand ideological rigidity. The time for that is past. The time now is to work together in some reasonable way so we advance legislation that both extends the debt limit to avoid the catastrophic consequences of a default and deals with the debt threat itself. The New York Times on Wednesday had this story: ``On All Levels of the Economy, Concern About the Impasse.'' What they were talking about is the rating agencies saying that if we don't do both, if we don't extend the debt limit and deal effectively with the debt itself, they are going to downgrade the rating of our credit as a country. The story goes on to say: Economists and analysts are trying to gauge the costs to the economy and consumers if the United States loses its solid-gold credit rating--a move that appears more likely now that the stand-off in Washington over government spending has calcified. Some economists say the effects of lowering the Federal Government's credit rating to AA from AAA can be measured in the billions of dollars in increased borrowing costs for the government and in the billions more that consumers, corporations, states, and municipalities will have to pay for their credit. It also could erode consumer and business confidence, slowing even further the economy and job creation. It has started already. We have just learned the latest numbers on economic growth. They were a tepid 1.3 percent. This uncertainty being created by a failure to deal with our debt and with an extension of the debt limit is creating a headwind for our economy, reducing economic growth, slowing job creation, and costing us a stronger recovery. I want to remind colleagues that every 1 percentage point increase in interest rates adds $1.3 trillion to the deficits. So kicking this can down the road and not facing up to it has enormous consequences: $1.3 trillion added debt for every 1 percent increase in interest rates. This is just the effect on the Federal Government. Trillions more would be the effect on consumers, on companies, and on other levels of government with an increase in interest rates. The proposal by the Speaker that apparently the House is now prepared to send us has fatal flaws, and here they are: First of all, it would repeat the default crisis in just 6 months. That would continue the uncertainty and put the economy at further risk. Our friends on the other side have repeatedly said how uncertainty is hurting this economy, and now they themselves want to create more uncertainty. It makes no sense. The Boehner plan includes significantly less deficit reduction than does the Reid plan. The Boehner plan, as I understand it--we have not been able to calculate his newest version fully--was in the range of $1 trillion of savings. Majority Leader Reid's plan is well over $2 trillion of savings. Third, the Boehner plan provides no firewall between security and nonsecurity spending. That means even deeper cuts on the domestic side of the ledger because we all know what happens if you don't have a firewall. Finally, it requires an irresponsible balanced budget amendment approach that has been clearly rejected here and will be rejected again. That is certain. Standard & Poor's has warned against repeated debt ceiling debates. Here is what they said on July 26: We would be concerned if we thought that the debt ceiling debate would come back and be open and we'd have to go through all this again and again and again. That would be a negative, in our view. This is the rating agency that determines what the interest rates will be on the debt of our country--not directly but indirectly because if they rate down our creditworthiness, that will increase interest rates. So they are sending a very clear signal: Don't do the Speaker Boehner plan that has only a 6-month extension and repeat this whole process and create more uncertainty and put the economy further at risk. To avoid a U.S. credit rating downgrade, S&P wants to see a bipartisan debt-reduction effort, not the totally partisan approach Speaker Boehner has for the moment chosen to pursue. I don't know what could be more clear. The other body is in control of our friends in the other party; this body is in control of the Democrats. At the end of the day, we have to come together. We have to work together. Now, I have been part of two efforts to work together. Last year, the fiscal commission--18 of us were given the responsibility to come up with a plan to get our debt under control. At the end of the day, 11 of the 18 agreed on a plan--5 Democrats, 5 Republicans, and 1 Independent--fully bipartisan. I was proud to be part of the 11 who agreed to that plan. This year, I have been part of the Group of 6--3 Democrats, 3 Republicans--who were asked by about 30 of our colleagues to see if we could find a way to implement the findings of the commission because for the commission's findings to be implemented, they had to have a super-supermajority. They had to have 14 of the 18 agree, and even though we had 11 of 18, it wasn't enough. So about 30 Senators met at the beginning of this year, the end of last, and asked a group of us-- 6, 3 Democrats and 3 Republicans--to see if we could come up with a bipartisan plan. We worked all year, hundreds of hours, and we have agreed. We have laid out a plan for our colleagues. It is the only bipartisan plan before either Chamber. Speaker Boehner at this late hour is still pursuing a plan only on the Republican side of the aisle and only in one Chamber. That can't possibly be a recipe for success. David Beers, Standard & Poor's global head of sovereign ratings, said this on July 26: We will measure the deal on a number of parameters. One is, is it credible? And credibility, among other things, means to us that there has to be some buy-in across the political divide, across both parties, because politics can and will change going forward. And if there's ownership by both sides of the program, then that would give us more confidence. It's not just about the number. It's about the all-in intent. Mr. President, are our colleagues listening? The solution cannot be found on just one side of the aisle in one Chamber. This is going to require bipartisan, bicameral cooperation. We are going to have to act like adults, not like kids in a schoolyard pointing fingers, spreading rumors, spreading blame. That will not lead to success. Here is the circumstance we face. The red line is the spending line of the United States going back 60 years, and the green line is the revenue line of the United States going back 60 years. What you can see is that the revenue of the United States as a share of our national income is the lowest it has been in 60 years. Spending as a share of our national income is the highest it has been in 60 years. Revenue is the lowest, spending is the highest--that is why we have record deficits. Clearly, you have to work both sides of the equation to get a solution. Some of our friends on the other side are saying: Don't touch revenue. Some of our friends on both sides are saying: Ah, and don't touch entitlements. Don't touch Medicare, don't touch Social Security, don't touch Medicaid. If you can't touch revenue and you can't touch the entitlements, you can't solve the problem by definition. When you are borrowing 40 cents of every dollar and you exclude all revenue--that is half the equation--and you exclude 60 percent of Federal spending--if you eliminated all the rest of Federal spending, every dime for defense, for nondefense discretionary, if you eliminated every dime, it wouldn't solve the problem. At some point we have to get serious and real with the American people. The balanced budget amendment our colleagues in the House sent us previously, that has already been rejected here once. Now they are putting it in the package to send to us again at the eleventh hour--it is a balanced budget amendment that is as deeply flawed as any amendment I have seen in 25 years in this Chamber. Let me review what our friends on the other side sent us in a balanced budget amendment that was rejected here just in the last few weeks: No. 1, it would restrict the ability to respond to economic downturns--meaning we would compound the decline. That is bad economics, and it is not going to pass. No. 2, it uses Social Security funds to calculate balance and subjects that program to the same cuts as other Federal spending even though Social Security has its own trust fund and is separately funded. No. 3, it shifts the ultimate decisions on budgeting to unelected and unaccountable judges. No. 4, it requires a State ratification process that could take years to complete. We don't have years to wait for a State ratification process for a constitutional amendment. We need to make these spending and revenue decisions ourselves, and do it now. It is our responsibility. Let's not wait for the States to ratify a constitutional amendment before we take the action that is necessary. The balanced budget amendment the House previously sent us has the risk of turning a recession into a depression. Why do I say that? There is no provision in the amendment they sent us for an economic downturn as being an exemption from the balanced budget requirement. That is Hoover economics all over again. How many times do we have to learn the harsh lesson that when we are in an economic freefall, the only entity big enough to pull us out is the collective organization of our government? That is the only place that has the muscle to prevent a recession from turning into a depression. The balanced budget amendment our colleagues sent us before would absolutely lock down the Federal Government's ability to respond. That would be a profound mistake and contradict all we have learned in economics since the Great Depression. This is what Norman Ornstein, a scholar at the American Enterprise Institute, said about this constitutional amendment. He called it a ``really dumb idea.'' This is what he said: Few ideas are more seductive on the surface and more destructive in reality than a balanced budget amendment. Here is why: Nearly all our States have balanced budget requirements. That means when the economy slows, States are forced to raise taxes or slash spending at just the wrong time, providing a fiscal drag when what is needed is countercyclical policy to stimulate the economy. In fact, the fiscal drag from the states in 2009-2010, was barely countered by the Federal stimulus plan. That meant the Federal stimulus provided was nowhere near what was needed but far better than doing nothing. Now imagine that scenario with a federal drag instead. The Washington Post ran an editorial about the House balanced budget amendment headlined, ``A Bad Idea Returns.'' Rewriting the Constitution is the wrong way to deal with the debt. Here is what they said in their editorial: Worse yet, the latest version would impose an absolute cap on spending as a share of the economy. It would prevent Federal expenditures from exceeding 18 percent of the Gross Domestic Product in any year. Most unfortunately, the amendment lacks a clause letting the government exceed that limit to strengthen a struggling economy. No matter how shaky the State of the Union, policymakers would be prevented from adopting emergency spending such as, the extension of unemployment insurance and other countercyclical expenses that have helped cushion the blow of the current economic downturn. It doesn't stop there. This is what Senator McCain said on the Republican balanced budget amendment proposal on July 27: What is amazing about this, some members are believing we can pass a balanced budget amendment to the Constitution in this body with its present representation, and that is foolish. That is worse than foolish. That is deceiving many of our constituents. . . . That is not fair to the American people to hold out and say we will not agree to raising the debt limit until we pass a balanced budget amendment to the Constitution. It is unfair. It is bizarro. Maybe some people who have only been in this body for 6 or 7 months or so believe that. Others know better. . . . It is time we listened to the markets. It is time we listened to our constituents. Most of all, it is time we listened to the American people and sit down and seriously negotiate something. . . . Senator McCain had it exactly right. Sending us a deeply flawed balanced budget amendment to the Constitution of the United States at the eleventh hour is not designed to achieve a result. It is designed to achieve a headline, a bumper sticker slogan that will not help us solve the problem. Here is what a top economic adviser to former President Reagan said about the House balanced budget amendment. This is Bruce Bartlett, a former Reagan administration top economic adviser. He said: I have previously explained the idiocy of right wing advocates . . . of a balanced budget amendment. However, the new Republican balanced budget proposal is especially dimwitted. . . . In short this is quite possibly the stupidest constitutional amendment I think I have ever seen. It looks like it was drafted by a couple of interns on the back of a napkin. Every Senator cosponsoring this balanced budget amendment should be ashamed of themselves. That is from a former top economic adviser to Ronald Reagan. Is anybody listening? Is anybody paying attention to how far off base things have slipped in the other body to send us at this moment, at this critical juncture, a plan that has absolutely no chance of passing in this body, and should not? What is so deeply flawed is--in addition to the other points I have made--the balanced budget amendment the House Republicans sent us earlier set a spending cap of 18 percent of GDP. Well, let's add up what that would mean. We can see Social Security is the red band. That is about 5 percent of GDP. If we add defense and all other nonhealth care spending, that takes us up to about 16.5 percent of GDP. Interest on the debt takes us to over 18 percent of GDP. Do you notice what is missing? Medicare. In the Republican plan they sent to us with a spending cap of 18 percent of GDP, if we fund Social Security, if we fund defense and other nonhealth spending, and we fund interest on the debt, there is no money left. There is no money for Medicare. There is no money for Medicaid. There is no money for any health care spending. That is what the House of Representatives sent us in the last several weeks as a balanced budget amendment to the Constitution of the United States. When some on our side called it cut, cap, and kill Medicare, they were not kidding. If we add it up, it does not add up. Not only that, the balanced budget amendment our colleagues in the House sent us in the last few weeks also said it would take a two-thirds vote to get any additional revenue even though revenue is the lowest it has been in 60 years. They would apply a two-thirds requirement to get more revenue. Really? So they would protect with a two-thirds vote requirement every tax scam, every offshore tax haven, every abusive tax shelter that is currently being used by some to avoid and evade the taxes they owe our country. I have shown this picture on the floor of the Senate many times. This is a little building in the Cayman Islands. It is a little five-story building that claims to be home to 18,857 companies. They all say this is their business headquarters. I have said that is the most efficient building in the world. A little five-story building down there, and it is the headquarters of 18,000 companies. Anybody believe that? Anybody believe that 18,000 companies are operating out of that little building down in the Cayman Islands? They are not operating their businesses out of there. They are engaged in a giant tax scam to make all the rest of us pick up their responsibilities. All of us who pay what we owe are getting stuck by the companies that are hiding out in this little building down in the Cayman Islands avoiding the taxes they owe our country. There are no taxes down in the Cayman Islands, so they operate out of this little building down there, five-story building, 18,000 companies. They avoid paying the taxes they owe and stick all the rest of us with the responsibility. That is not right. The constitutional amendment our colleagues in the House of Representatives sent us would protect that behind a wall of a two- thirds vote, which means we would have an impossible time ever fixing this problem. It is hard to get a 60-percent vote much less two-thirds. They would protect every offshore tax haven, every abusive tax shelter, every unfair tax preference that is in the current code because they would require a two-thirds vote to change it. That flawed amendment is not going to pass the Senate--not now, not later this year, not next year because it, itself, would require a two-thirds vote. It is not going to happen. So I would say to our colleagues in the other Chamber that sending us a totally partisan approach with a deeply flawed constitutional amendment is not going to work. It is not going to help solve the problem. Now is the time for us to join in a serious dialogue about solving the problem--solving the debt threat overhanging the country which will require not a $1 trillion package as is in the House offering but a $4 trillion package. The occupant of the chair well knows of what I speak. He was Governor of West Virginia. He dealt with a fiscal crisis in his State, and he guided his State through that crisis not by operating just on one side of the aisle but by working together with people on both sides to come up with solutions, not political slogans. We are way beyond that. We are within days of a default on the debt of the United States that would have catastrophic consequences for the economy of our country. It is time. It is time, I say to my colleagues, to come together to do something that can pass--to deal, yes, with the debt limit but also to deal with the debt itself. It will be an empty gesture if we just extend the debt limit and we don't deal with the debt itself. Our leader, to his credit, has put something together that begins to take ideas from both sides of the aisle to try to resolve this crisis. It would save the Nation from an immediate economic crisis. It would provide a significant downpayment on deficit reduction--more than $2 trillion--and it would put in place a special joint congressional committee, equally divided, Democrats and Republicans, to find additional savings. Also, there is no new revenue in this plan. Our friends on the other side have thus far said--at least in the House of Representatives--they can accept no new revenue, none, not a penny. So our leader has said: OK. I don't like that, but if that is your line in the sand, for right now we will accept it so we can find a solution both sides can support. So no new revenue, more than $2 trillion of spending cuts, and a special joint committee to come up with a plan to achieve even greater savings. That is a pretty good offer to the other side to say: We hear you. We want to work with you because we need a solution. We are just days away from a true crisis, one that would be self- inflicted. I say to my colleagues, let's not go there. Let's come together. We have shown we can do it in the past. We need to do it now--not with blame, not with finger-pointing, but by saying this is a time to join together, to stand shoulder to shoulder to prevent irreparable damage being done to our country. I say to my colleagues: Now is the time, this day, we have to find a way to come together. I thank the Chair and yield the floor. I note the absence of a quorum.

Mr. CONRAD

Mr. CONRAD. I ask unanimous consent that the order for the quorum call be rescinded.

Mr. CONRAD

Mr. CONRAD. Mr. President, in about an hour, we are going to vote on a package that was sent to this body by the House of Representatives. Let me first comment on the context within which we consider this legislation. I think it is very important to remind our colleagues and remind citizens across the country who are perhaps watching and listening that our country is borrowing more than 40 cents of every $1 we spend. That is unsustainable. It cannot be continued for long. I think all of us know that the circumstance we are in is extraordinarily serious. Here is what the Chairman of the Joint Chiefs of Staff told us just a year ago: Our national debt is our biggest national security threat. I believe that is the case. Our gross debt now is approaching 100 percent of the gross domestic product of the United States. We have not seen a debt that high since after World War II. It is extraordinarily important that we take on this debt threat. It is extraordinarily important for our country's future economic well-being that we change course. The legislation that has been sent to us by the House is one of the most ill-considered, ill-conceived, internally inconsistent pieces of legislation I have seen in my 25 years in the U.S. Senate. It has all the earmarks of something that was hastily thrown together, really pasted together. This legislation includes an amendment to the Constitution of the United States. We are better than this. The Congress is better than this. Certainly, the country is better than this. Let me just be brief. The fundamental problems with this balanced budget amendment are as follows: One, it restricts the ability to respond to economic downturns, having all the potential to make an economic downturn even more serious. It uses Social Security funds to calculate balance and subjects that important program to the same cuts as other Federal spending, even though it is funded separately. It shifts the ultimate decisions on budgeting in this country to unelected and unaccountable judges. Finally, it requires a State ratification process that could take years to complete. We need a long-term debt resolution now, not in the sweet by-and-by. The proposal before us has all of the potential to turn a recession into a depression. Why do I say that? Because it would prevent Congress from taking urgent action to provide lift to the economy in the midst of a severe economic downturn. Here is what Norman Ornstein, a distinguished scholar at the American Enterprise Institute, said about this: Few ideas are more seductive on the surface and more destructive in reality than a balanced budget amendment [to the constitution]. Here is why: Nearly all our states have balanced budget requirements. That means when the economy slows, states are forced to raise taxes or slash spending at just the wrong time, providing a fiscal drag when what is needed is countercyclical policy to stimulate the economy. In fact, the fiscal drag from the states in 2009-2010 was barely countered by the federal stimulus plan. That meant the federal stimulus provided was nowhere near what was needed but far better than doing nothing. Now imagine that scenario with a federal drag instead. The Washington Post editorialized: Worse yet, the latest version [of the balanced budget amendment] would impose an absolute cap on spending as a share of the economy. It would prevent federal expenditures from exceeding 18 percent of the gross domestic product in any year. Most unfortunately, the amendment lacks a clause letting the government exceed that limit to strengthen a struggling economy. That has all of the potential to turn a recession into a depression. Two of this country's most distinguished economists, Alan Blinder, former Vice Chairman of the Federal Reserve, and Mark Zandi, former consultant, adviser to Senator McCain in his Presidential campaign, evaluated the government response to the last downturn. Their conclusion: Absent that Federal response, we would have had ``Great Depression 2.0.'' The legislation before us would have prevented that Federal response. They call this legislation cut, cap, and balance. They misnamed it. They should have called it ``cut, cap, and kill Medicare'' because that is precisely what it would do. Why do I say that? Because when I referred earlier to the inconsistency of this legislation, this is what I was referring to. They have two different spending caps in the legislation before us. In one part of the legislation, they say the spending cap would take spending from 24.1 percent of GDP to 19.9 percent. That is in one part of the bill before us. In another part of the bill--the constitutional amendment--they say the spending cap would be 18 percent of GDP. So I do not know who cooked this up, but you would think they would have at least gotten on the same page as to what is the limitation on spending. What does it mean if you have a balanced budget amendment with a cap of 18 percent of GDP? Here is what it means--by the way, the constitutional provision would certainly trump the conflicting provision that is in this legislation. So the cap would not be 19 percent of GDP, the cap would not be 19.9, it would be 18 percent of GDP. What would that mean? Well, this dotted black line is 18 percent of GDP. If you fund just Social Security, defense and other nonhealth spending, and interest on the debt, you are at 18 percent of GDP. There is not a dime left for Medicare. There is not a dime left for Medicaid. Is that really what they intend? It must be because that is what it says. So Medicare is finished. Medicaid is finished. Anybody who votes for this ought to understand what they are voting to do. Here is a former top economic adviser to President Reagan. Here is what he said about the amendment that is before us: In short, this is quite possibly the stupidest constitutional amendment I think I have ever seen. It looks like it was drafted by a couple of interns on the back of a napkin. Every Senator cosponsoring this legislation should be ashamed of themselves. That is a former top economic adviser to Ronald Reagan. I have been here 25 years. I don't think I have ever seen a piece of legislation more unprofessionally constructed than the legislation before us. But those are not the only problems. When they titled this ``cut, cap, and balance,'' they could have also called it ``preserve, protect, and defend tax havens and tax shelters'' because that is the other consequence of this legislation. Why do I say that? Because it would take a two-thirds vote to increase revenue--a two-thirds vote. That means attempts to shut down these offshore tax havens, these abusive tax shelters--because they would raise revenue--would take a two-thirds vote. What does that mean? Well, here is a little building down in the Cayman Islands. I have talked about this many times. It is a little 5- story building that claims to be home to 18,857 companies. They claim they are doing business out of this little building. I have said this is the most efficient building in the world. Quite remarkable that 18,857 companies are doing business out of this little 5-story building. I am told there are not many people coming and going from this building during the day. Are 18 companies really doing their business--they call this ``headquarters.'' Is that really their headquarters? We all know that is not their headquarters. We all know what is going on. It is not business; it is monkey business. What they are doing down there is avoiding the taxes all the rest of us pay. This amendment would protect this scheme. You want to protect this scheme, vote for this amendment. How big is this scheme? Well, here is what our own Permanent Subcommittee on Investigations has told us: Experts have estimated that the total loss to the Treasury from offshore tax evasion alone approaches $100 billion a year, including $40 billion to $70 billion from individuals and another $30 billion from corporations engaging in offshore tax evasion. Abusive tax shelters add tens of billions of dollars more. You want to lock in these abuses? You prefer to pay more in taxes yourself so that people can engage in these scams? Vote for this amendment. Vote for the legislation that is before us. Vote for what is on the floor because you will protect them forever more. I end as I began. This is perhaps the most ill-conceived, ill- considered, internally inconsistent legislation I have ever seen in my 25 years in the Senate. I hope my colleagues have the wisdom to vote no. I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. CONRAD. Mr. President, I rise today to discuss the legislation that has come over from the House of Representatives which, I must say, I consider to be some of the most ill-considered legislation I have ever seen come over from the other body. This legislation has been hastily thrown together, has never had a hearing, and yet proposes to amend the Constitution of the United States in dramatic and draconian ways. This is truly dangerous business. I have been a part of the fiscal commission, and I was part of the majority that supported its conclusions to reduce our debt from what it would otherwise be by $4 trillion. Eleven of us supported that plan-- five Democrats, five Republicans, and one Independent. I have been a part of the Group of 6--three Democrats and three Republicans--and we have released our plan to reduce the debt from what it would otherwise be by $3.7 trillion. I have been part of putting out the Democratic Senate Budget Committee plan, and I am proud to say it would reduce the debt from what it would otherwise be by $4 trillion. In my entire career, 25 years in the Senate, I have consistently spoken of the dangers of deficits and debt and the risk of the debt threat to our country. I believe passionately that we have to find a way to come together to reduce the danger of these runaway debts. But this legislation that has come over from the House cannot be the answer. It is not bipartisan. In fact, it is superpartisan. It is totally done on one side of the ledger. It will not pass, it will not become law, and it should not. Now, let's understand the context within which we are operating. First of all, as a country, we are borrowing 41 cents of every dollar we spend. Our gross debt is now 100 percent of our gross domestic product. The best economists in the country have warned us that once we get to a debt that is more than 90 percent of our gross domestic product, our future economic prospects are in danger. Future economic growth is reduced. That is why I have been deeply involved in every serious bipartisan attempt to reduce deficits and debt. This proposal that has come over from the House--not having had a single hearing in this body, not one--is truly radical. Again, I say to my colleagues, we have an urgent need to act, but we shouldn't panic. Unfortunately, I think that is what the House did when they sent us this half-baked concoction of ideas that don't hold together, that don't add up, and that would actually further threaten the economic recovery. There is no denying we face a debt threat. This is what the Chairman of the Joint Chiefs of Staff said in June of last year: Our national debt is our biggest national security threat. Now we have had the rating agencies warn us that if we don't act, if we don't get our debt and deficits under control, they are going to downgrade the rating of U.S. debt--the rating of how the markets respond to our debt offerings. That would have a very serious impact on what we pay to borrow money. Remember, for every 1 percent increase in the interest rates we pay, it adds $1.3 trillion to the debt. Here is what one rating agency has said: We may lower the long-term rating on the U.S. by one or more notches into the AA category in the next 3 months, if we conclude that Congress and the administration have not achieved a credible solution to the rising U.S. Government debt burden and are not likely to achieve one in the foreseeable future. That is why I joined the Gang of 6 some 6 months ago, to produce a bipartisan plan to deal with the debt threat. And we have released that plan now--three Democrats, three Republicans. Many more of our colleagues on both sides have joined and said they are with us. So we have a way forward, but it is certainly not the legislation that has come over from the House of Representatives that we are considering today. The House legislation would restrict the ability to respond to economic downturns and actually compound declines. It uses Social Security funds to calculate balance and subjects that program to the same cuts as other Federal spending, even though we all understand that is totally separate from the rest of the budget. It shifts ultimate decisions on budgeting to unelected and unaccountable judges. What a mistake that would be. It requires a State ratification process that could take years to complete. We don't have years to deal with this problem. I am afraid the House legislation is mostly political theater that has been sent to us rather than a serious response to the problem. But perhaps most alarming, the proposal before us could turn a recession into a depression. We need to think very carefully how we respond to this debt threat, and then we need to react in a serious and credible way, and we have to stand together with our colleagues. That is why I was proud to be a part of the fiscal commission, because we produced a plan that would get our debt under control and start reducing it. There were 11 of us--five Democrats, five Republicans, and one Independent--and a majority of that commission agreed to that plan. It is why I have been proud to be part of the Gang of 6 in the Senate--three Democrats, three Republicans. We have produced a plan to control our debt and to begin to work it down. None of those plans, and none of the other bipartisan plans, would risk turning a recession into a depression. But that is exactly what the legislation from the House would do. Now, why do I say that? Well, here is one of the most respected scholars in this town. He is from the American Enterprise Institute. He called the balanced budget amendment that has come from the House a really dumb idea. This is what he said: Few ideas are more seductive on the surface and more destructive in reality than a balanced budget amendment. Here is why: Nearly all our states have balanced budget requirements. That means when the economy slows, states are forced to raise taxes or slash spending at just the wrong time, providing a fiscal drag when what is needed is countercyclical policy to stimulate the economy. In fact, the fiscal drag from the states in 2009-2010 was barely countered by the Federal stimulus plan. That meant the Federal stimulus provided was nowhere near what was needed but far better than doing nothing. Now imagine that scenario with a Federal drag instead. Mr. Ornstein doesn't just imagine that, the Washington Post, in an editorial from last Friday, said: Rewriting the Constitution is the wrong way to deal with the debt. Let me just reference, from their second column, these words: Worse yet, the latest version would impose an absolute cap on spending as a share of the economy. It would prevent Federal expenditures from exceeding 18 percent of the gross domestic product in any year. Most unfortunately, the amendment lacks a clause letting the government exceed that limit to strengthen a struggling economy. No matter how shaky the state of the union, policymakers would be prevented from adopting emergency spending, such as the extension of unemployment insurance and other countercyclical expenses that have helped cushion the blow of the current economic downturn. Two of the most distinguished economists in our country, Alan Blinder, the former Deputy Chairman of the Federal Reserve, and Mark Zandi, who was an adviser to John McCain's Presidential campaign, studied the government response to the latest financial crisis. Here is what they concluded: We find that its effects on real GDP, jobs, and inflation are huge, and probably averted what could have been called Great Depression 2.0. This amendment before us would have stopped the governmental response, which two of the Nation's most distinguished economists tell us averted Great Depression 2.0. Quoting further from the article: When all is said and done, the financial and fiscal policies will have cost taxpayers a substantial sum, but not nearly as much as most had feared and not nearly as much as if policymakers had not acted at all. If the comprehensive policy responses saved the economy from another depression, as we estimate, they were well worth their cost. This amendment that is before us now would have prevented this response and would have prevented averting a Great Depression. Here is the work of Zandi and Blinder with respect to what would have happened to jobs absent the Federal response. Jobs with the Federal response, the green line; jobs without the Federal response, the red line: 8 million fewer jobs without the Federal response to prevent a depression. Unemployment, what would have happened without the Federal response, according to this detailed study by Zandi and Blinder: Without the Federal response, unemployment today would be about 16 percent instead of the 9 percent we are experiencing. We would be in a depression. That is the hard reality. The amendment before us would have prevented that kind of governmental response. They call this plan cut, cap, and balance. They should have called it cut, cap, and kill Medicare, because that is what this plan would do; it would cut, cap, and kill Medicare. Why do I say that? Well, if we look at the House budget proposal that underlies this plan, we see what happens under traditional Medicare. Under traditional Medicare, the beneficiaries would pay 25 percent of their expenses. Under the Republican budget plan that underlies the amendment that has come before us, Medicare beneficiaries would pay 68 percent of the expenses of their health care. In other words, somebody who is Medicare eligible, qualifies for the program, pays their required costs, pays their required copays, pays their required premiums, pays 25 percent of the cost under the plan. With the Republican plan from the House, that would increase to 68 percent. That stands Medicare on its head. Instead of Medicare, as normal insurance does, paying the lion's share, individuals would pay the lion's share of their health care expenses. The underlying House Republican plan that underlies this amendment would increase the out-of-pocket costs to a Medicare beneficiary from $6,000 to $12,500. That would be health spending for a typical 65-year- old Medicare beneficiary in 2022. Instead of paying $6,000 under current law, they would pay $12,500. Somebody who has been following the details will look at these numbers and say, Well, Senator Conrad, what you have outlined there is the House Republican plan. And what has been sent you in an amendment actually is even more draconian than the House Republican plan. It goes even further. It cuts Medicare even more. And, yes, that is true. I have understated very substantially the devastation that would be done to Medicare under the amendments before us. But how can that be? Well, here is how it can be. The red line shows the spending under the House GOP budget. But in this amendment, in this legislation that has come to us, not only did they adopt the House Republican budget, they then trump it. They then override it with a constitutional amendment that goes even further. Here is the spending under the House Republican plan. It goes from 24 percent of GDP down to 19.9. Then it is leapfrogged by the provisions of the constitutional amendment that would take spending down to 18 percent of GDP. From 24.1 to 18, that is a 25-percent cut if you took the cut across the board. But their plan doesn't take the cut across the board. It shields certain things. So the cuts to those things that aren't shielded have to be more draconian and even deeper. Visually I thought I should produce a chart that shows what would happen if you had to reach the limit that is in the constitutional amendment that is before this body today. With an 18-percent cap on all gross domestic product spending, here is Social Security. That is 5 percent of gross domestic product. Defense and other nonhealth spending, as you can see, takes you well over 15 percent. Then you have interest, and you are at their cap. There is no money for Medicare. There is no money for Medicaid. There is no money for any of the other health care accounts. If they hold harmless Social Security, defense and other nonhealth spending, and of course we have got to pay interest on the debt, there is nothing left over. That is why I call this cut, cap, and kill Medicare. I should have added cut, cap, and kill Medicaid. Cut, cap, and kill every other health care account. This plan caps spending going forward at draconian and unrealistic levels. It fails to account for the retirement of the baby boom generation and rising health care costs. Perhaps more remarkable, it provides no war funding for 2013 to 2021. Nothing. Let me repeat that. This plan that has come over from the House is so ill-considered, so hastily thrown together, so lacking in credibility that they provide for no war funding after 2013. Does that mean they are advocating bringing all the troops home from every location everywhere around the world? Well, I am certain not, because that is not the position they have taken. But they don't provide any money for it. I don't know who slapped this thing together, but they weren't very careful in what they did. None of it adds up. It is totally make- believe. This is not make-believe. This is what is going to happen to the number of people who are eligible for Medicare and Social Security running up to 2050: The number of people eligible is almost going to double. That is a demographic tidal wave that is a reality. It is not a projection. These people have been born. They are alive today. They are going to retire. They are going to be eligible. This amendment before us makes no provision for them. So what is going to happen? They are going to shred Medicare, they are going to shred Medicaid, and they are going to put at risk Social Security. That is as clear as it can be. Here is the reality we confront today as a nation. Spending as a share of GDP is the highest it has been in 60 years, but revenue as a share of GDP is the lowest it has been in 60 years. Both of these are facts, both of these are true. Our friends on the other side are saying you cannot touch the revenue side of the equation, even if it is closing tax havens, going after abusive tax shelters, going after tax scams that proliferate the Tax Code today. They say, Oh, no, you can't touch that; you can't make any changes on the revenue side of the equation, even though the revenue is the lowest it has been in 60 years as a share of our national income. They say it would take a two-thirds vote, and they would put it in the Constitution of the United States that they would require a two-thirds vote to close any tax haven, any tax shelter, any abusive tax scam would take a two-thirds vote. That is not what I learned when I was growing up about the Constitution of the United States. It didn't say anything about protecting those who engage in tax scams and tax havens and abusive tax shelters. But that is what this plan would do. The Washington Post back in May did an analysis: How did we get into this ditch we are in of runaway debt and runaway deficits? How did we get into this position? Their conclusion after this study was that: The biggest culprit by far has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and tax bills enacted under former President George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That is nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years. This amendment before us would require a two-thirds vote to do anything about it? Let's get serious. As I say, I have been part of every serious bipartisan effort here over the last 2 years to come up with a plan, to get our debt under control. So, yes, cut spending; yes, reform entitlements; yes, get the revenue base recovered so we can reduce our debt. But this plan before us is a disaster. Let's look at reality. The last five times the budget has been in surplus in the last 40 years, revenue has been close to 20 percent of GDP. This plan would require a two-thirds vote to increase any revenue. Revenue is at 14.8 percent of GDP. Wow. You talk about consigning this country to an endless round of economic uncertainty and an undermining of the economic position of the United States, vote for this thing. Martin Feldstein, who is one of the most conservative economists in the country, has said we have got to take on these tax expenditures. Tax expenditures now amount to $1.1 trillion a year. We are spending more through the Tax Code than we are in all appropriated spending every year, and yet this amendment would require a two-thirds vote to change any of those tax expenditures, to close any of the tax loopholes, to go after any of the tax havens and abusive tax shelters. Here is Martin Feldstein, Professor of Economics at Harvard, Chairman of the Council of Economic Advisers under President Reagan. This is what he said: Cutting tax expenditures is really the best way to reduce government spending. Eliminating tax expenditures does not increase marginal tax rates or reduce the reward for saving, investment or risk-taking. It would also increase overall economic efficiency by removing incentives that distort private spending decisions. And eliminating or consolidating the large number of overlapping tax-based subsidies would also greatly simplify tax filing. In short, cutting tax expenditures is not at all like other ways of raising revenue. Interestingly enough, every bipartisan commission has come back and said, as one part of dealing with our deficits and debt, we ought to reduce tax expenditures. It is spending by another name. But do you know what. The legislation before us would require a two-thirds vote to change any of these tax expenditures because it raises revenue. It raises revenue, so they are against that. Here is where the tax expenditures go. The top 1 percent get 26 percent of the value of tax expenditures. These loopholes that have proliferated have gone to the very top. We are going to have to reform this Tax Code, take out the junk, and at the same time we are going to have to go after these offshore tax havens and tax shelters that some of the very best off among us, the most fortunate, are using to dodge what they legitimately owe in this country. They call this legislation cut, cap, and balance. They should have called it preserve, protect, and defend tax havens and tax shelters because that is, in effect, what it would do. They say if we go after these tax havens and these tax shelters that is a tax increase. That increases revenue; therefore, it should take a two-thirds vote to do anything about it. Let me say to my colleagues, this is a little five-story building down in the Cayman Islands. It claims to be home to 18,857 companies. They all say they are doing business out of this little building. This is the most efficient building in the world. It is unbelievable: 18,857 companies say they are doing business out of this little building. That is a remarkable accomplishment, to be running 18,000 businesses out of this little building. How can that possibly be? Of course it is not. The only thing they are running down there is a giant tax scam on all the rest of us who pay what we owe. By the way, it has no taxes that apply to these businesses. We are not down in the Cayman Islands. We are right here. We are filing our taxes, and we are paying them. These companies are dodging theirs. If anybody doubts that this has become a huge hemorrhage for the U.S. Treasury, here is what our own Permanent Subcommittee on Investigations has found: Experts have estimated that the total loss to the Treasury from offshore tax evasion alone approaches $100 billion per year, including $40 billion to $70 billion from individuals and another $30 billion from corporations engaging in offshore tax evasion. Abusive tax shelters add tens of billions of dollars more. Before we raise taxes one thin dime on any of the rest of us who are paying our taxes, let's go after these folks who are dodging their responsibilities and their obligations. This amendment before us would require a two-thirds vote to do it. That is not the end of it. Here is what happened to the tax rates of the most wealthy 400 families in the United States, their effective tax rates since 1995. In 1995 their effective tax rate was 29.9 percent. By 2007 it was down to 16.6 percent. The wealthiest among us have had their tax rates about cut in half. I don't know about you, but I didn't have my taxes cut in half. The vast majority of Americans did not have their taxes cut in half. But with the help of well-placed lobbyists here, those who are the most fortunate have had their effective tax rates cut in half. This amendment before us would say it would take a two-thirds vote to change that. That is why I say this amendment should be called preserve, protect, and defend tax havens and abusive tax shelters. The last time the top rate was 39.6 percent we experienced the longest period of uninterrupted economic growth in U.S. history. Those who say if we raise any revenue we kill jobs--really? That is not what history shows. The last time we had a comprehensive plan to cut spending and raise revenue to reduce the debt--during the Clinton administration--we kicked off the longest period of uninterrupted economic growth in U.S. history: 39 straight quarters of economic growth, 32 of those quarters during the Clinton administration, and 24 million jobs were created. Dealing with the deficit and the debt in a balanced and comprehensive way does not kill jobs. It creates the climate for the creation of jobs because it improves the competitive position of the United States. I have been part of three plans to reduce this debt from what it would otherwise be by $4 trillion. The fiscal commission plan--I served, 11 of us, 5 Democrats, 5 Republicans and 1 Independent endorsed that outcome. I was part of the Group of 6, 3 Democrats and 3 Republicans. We produced a plan to reduce the deficit and debt from what it would otherwise be by $3.7 trillion. I was part of the Democrats on the Senate Budget Committee that unveiled a plan to reduce deficits and debt from what they otherwise would be by $4 trillion. So I have been happy to be part of bipartisan efforts, efforts just on our side of the aisle, and interestingly enough every single commission has come up with a package of about $4 trillion in deficit savings. I think the Group of 6 did yeoman's work, bringing the deficit down from 9.3 percent of GDP, down to 1.9. Yes, we have revenue; yes, we have spending cuts; yes, we reform entitlement programs--because all of that is necessary. This legislation before us says: Whoa, wait a minute. We don't want to do it all. We want to focus on just part of it. This problem is too big to try to solve it with just part of the Federal fiscal picture. It is going to take all parts to solve this problem. The Group of 6, I am proud to say, came up with a plan that stabilizes this debt and begins to bring it down, avoiding this skyrocketing debt we are otherwise going to experience. This legislation before us would stop it in its tracks. I think that would be a profound mistake. I hope my colleagues reject this ill-considered plan. I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, the Senate has resumed the motion to proceed to S. 1323, a bill to express the sense of the Senate on shared sacrifice in resolving the budget deficit. The time until 5:30 will be equally divided between the two leaders or their designees. At 5:30, there will be a rollcall vote on the motion to proceed to S. 1323. Measure Placed on the Calendar--S. 1340

Mr. CONRAD. Mr. President, I understand S. 1340 is at the desk and due for a second reading.

Mr. CONRAD. Mr. President, I object to any further proceedings with respect to the bill.

Mr. CONRAD. I thank the Chair. Mr. President, we are in the midst of a defining debate on the budget of the United States. All of us understand we have a debt threat looming over this country that is as significant as anything we have faced in many years. Democratic members of the Senate Budget Committee have worked for weeks to devise a blueprint we think has merit and that deserves to be a part of the debate. Today, I am here to outline the key elements of that budget blueprint. First of all, I think it is critically important we all understand we are as a Nation borrowing 40 cents of every $1 we spend. That is not a sustainable circumstance. Admiral Mullen, the Chairman of the Joint Chiefs of Staff, has indicated that our national debt is our biggest national security threat. This is the top military man in our country saying the debt threat is the most serious national security threat. Why does he say that? Here are the facts: The debt of the United States--the gross debt--all the debt we owe is now approaching 100 percent of our gross domestic product, which is the highest level it has been since after World War II. This chart shows a threshold of 90 percent and a gross debt of 90 percent. Why did we draw that line on this chart? Because the best evidence we have tells us when we cross the 90-percent threshold on the gross debt of any nation, we are in the danger zone, we are in the red zone. The distinguished economists Carmen Reinhart and Kenneth Rogoff wrote a book called ``Growth in a Time of Debt.'' Here is their conclusion: We examined the experience of 44 countries spanning up to two centuries of data on central government debt, inflation and growth. Our main finding is that across both advanced countries and emerging markets, high debt to GDP levels (90 percent and above) are associated with notably lower growth outcomes. This is a key fact all our colleagues need to know. When our gross debt goes over 90 percent of our gross domestic product, our future economic prospects are diminished. That means fewer jobs created, less economic opportunity--a nation that is at risk. That is where we are. Look at what the Congressional Budget Office says is where we are headed. On the current trajectory, we are headed for a debt that will go to 200 percent of the gross domestic product of the country. This is not the gross debt; this is the publicly held debt, which is smaller than the gross debt. So this chart now looks at the publicly held debt and says it is headed for 200 percent of GDP. We cannot stay on this course. It is critically important we change direction. For every 1 percentage point increase in interest we pay, $1.3 trillion is added to the debt. For those who say don't worry about the debt limit, let's remind them what will occur if the United States refuses to pay the bills it has already incurred, which is the interest rates will go up. Those who have loaned us money, if we renege on our commitments to pay them, will then insist on higher interest rates--all borrowers will insist on higher interest rates--and for every 1-percent increase in the interest rate, we will pay $1.3 trillion more on our debt. So those who think that somehow, by not extending the debt limit, we are going to help on the debt--no. The opposite is true. The debt will increase and increase dramatically. Here are the hard facts with respect to the relationship between spending and revenue over the last 60 years in this country. The red line is the spending line. The green line is the revenue line. What this shows very clearly is that spending is the highest it has been as a share of GDP in 60 years. Yes, we have a spending problem. But it is not exclusively a spending problem, as some assert on this floor, because revenue as a share of GDP is the lowest it has been in 60 years. To deny that essential fact is to deny the significant elements of a compromise that are required to solve this problem. Spending is the highest it has been in 60 years as a share of our national income. Revenue is the lowest it has been in 60 years as a share of our national income. Both have to be addressed if we are going to solve this problem. For those who say: Well, it is not a revenue problem, oh, yes, it is. This is an article that appeared Sunday, May 1, in the Washington Post: ``On the way to a surplus, a $12 trillion U.S. detour.'' Remember, in 2001, we were told we were on the way to paying off the debt of the United States. This article by Lori Montgomery in the Washington Post on May 1 indicated the fundamental reasons that instead of paying off the debt, we have a debt that is mushrooming. This one paragraph says it all: The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former President George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That's nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years. That is the point I just made. So when Democrats on the Senate Budget Committee approached this problem, we looked at it in historical perspective. How did we get into this problem? Half of it is on the revenue side. So we chose to deal with a solution that deals on both sides of the ledger. Yes, we need to cut spending; absolutely, that must be done. But we also cut so-called tax expenditures that are just spending by another name--loopholes, exclusions, deductions, tax preferences, abusive tax shelters, and tax havens that are hemorrhaging revenue that rightfully belongs in the Treasury--people avoiding what they legitimately owe to the United States by engaging in abusive tax shelters and tax havens that is costing us substantial revenue. We will get into the specifics of that. The House Republicans chose a different path. They only want to focus on half the problem. They only want to focus on the spending side of the equation. They don't want to touch the revenue side of the equation. I believe that denies reality. That runs away from the hard reality of how we got into this situation. Again, we got here by, yes, spending that is higher than it has been in 60 years as a share of national income but also revenue that is lower than it has been at any time in 60 years. If we are truthful with ourselves, we are going to have to deal with both sides of this equation. The plan Senate Democrats on the Budget Committee have agreed on looks at a budget framework that includes roughly the same amount of deficit reduction as the House Republican plan. In fact, we have somewhat more deficit reduction than did they. They have a plan that was $3.9 trillion of deficit reduction. Our plan is $4 trillion. The actual difference is about $50 billion, but because of rounding, it turns out they are at $3.9 trillion, we are at $4 trillion. The actual difference is about $50 billion more in deficit reduction in the plan worked by Senate Democrats on the Budget Committee. So this is what happens to deficits as a share of GDP under the framework we are offering. As you can see, this year the deficit is 9.3 percent of gross domestic product. We bring it down very steadily until we get down to 1.3 percent in the 10th year--a lower deficit in dollar terms, a lower deficit as a share of GDP than the House Republican plan. Let me repeat that. The Senate Democrats on the Budget Committee--our plan reduces the deficit by the 10th year by more than the Republicans in total, and in the 10th year we have a lower deficit in dollar terms and a lower deficit as a share of GDP. As shown on this chart, this is what happens to the debt itself. The gross debt, as you can see, peaks out at 100 percent in 2011, and then we bring it down gradually but steadily to about 98 percent by 2021. The key is, instead of having the debt line going up, up, and away, burying this country under a mountain of debt, we stabilize the debt and begin to bring it down--something that every serious economist has said is absolutely essential. In terms of spending, I indicated that current spending is the highest it has been as a share of GDP in 60 years. Our plan takes that down from 24 percent of GDP to 23 percent and then freezes it at 22 percent of GDP for the rest of this decade. Now, some will say: There go the Democrats again. They are spending too much money. I would say to them: If we could get the spending down to the levels that were obtained during the Reagan administration, would that be acceptable? Because that is exactly what we do. Under the plan of Senate Budget Committee Democrats, we get spending to the exact same level that pertained during the administration of Ronald Reagan. During Ronald Reagan's 8 years, spending averaged 22.1 percent of GDP. That is precisely what our spending equals in the budget framework I have outlined here today. We include every part of the Federal budget, including the defense budget. Just as the fiscal commission did, just as every other bipartisan deficit reduction plan has included, we looked to defense spending for savings because no part of the budget can be off the table in terms of a deficit reduction plan. I would say separately, Social Security we deal with separately because Social Security need not be, should not be part of a deficit reduction plan. Savings on Social Security ought to be for the purpose of extending the solvency of Social Security. But in terms of those parts of spending that are considered on budget, defense has to be included in any savings. Why do I say that? Well, look what has happened since 1997. Spending on defense and war has gone from $254 billion a year to $688 billion a year. It is a key reason spending has exploded. Before the fiscal commission, some of the best defense analysts in the country came before us and told us that 51 percent of all Federal employees are at the Department of Defense--51 percent of all Federal employees are at the Department of Defense--and that does not count the contractors. I asked these analysts: Well, how many contractors are there? Their response was: Senator, we can't tell you. I said: Is that a matter of security? Is that a matter of clearances? They said: No, Senator. We don't know. I said: Well, what is the range? About how many contractors are there working at the Department of Defense? The answer was: Senator, 1 million to 9 million. Between 1 million and 9 million. We can't tell you which is right. We have a serious problem of contractors working for the Department of Defense and the Department of Defense cannot even tell you how many contractors they have working for them. We have a problem. The previous Secretary of Defense, Secretary Gates, said this: . . . the budget of the Pentagon almost doubled during the last decade. And he is right about that. Our chart shows that. But our capabilities didn't particularly expand. A lot of that money went into infrastructure and overhead and, frankly, I think a culture that had an open checkbook. ``A lot of that money went into infrastructure and overhead''-- overhead--``and, frankly . . . a culture that had an open checkbook.'' We cannot afford an open checkbook anywhere. We have to go after waste, fraud, and abuse in every department. We have to go after infrastructure spending that really does not contribute to improving our defense. We have to go after overhead, overhead costs that have really run amok. Chairman Ryan of the House said this about defense: There are a lot of savings you can get in defense. There's a lot of waste over there, for sure. Yet, when they came with their plan, they continued the path of increasing defense spending year over year without any discipline. This is the plan they outlined--from $529 billion a year headed for $667 billion a year, and that does not count the war funding. In our plan, we have done what the fiscal commission called for. We have achieved the same savings out of security as the fiscal commission did--$886 billion out of the security category. Now, that includes defense. Obviously, defense is most of security, but in the ``security'' category also falls homeland security, and also included is veteran spending. Veteran spending, by the way, is one place we do not cut a nickel. The veterans deserve to have the promise we have made to them kept, and under our budget, every dollar that has been promised to veterans will go to them. That does not mean we cannot save money out of the security side. The fiscal commission--which, by the way, is the only bipartisan plan that has come from anywhere: five Democrats, five Republicans, one Independent--endorsed a plan with $886 billion of savings over 10 years out of the security category. The budget by Senate Budget Committee Democrats adopts that finding. The budget that Senate Budget Committee Democrats are advancing also has governmentwide savings. We freeze the pay of Members of Congress for 3 years. We freeze the legislative branch and White House budgets for 3 years. We freeze civilian pay for 2 years. That has already been adopted, but we include that in our budget. We reduce the Federal vehicle fleet by 20 percent because, frankly, in our investigations we find in this area there has been an explosion of vehicles in the Federal fleet, and I think all of us have seen it with our own eyes. This is something that has to be taken on. We reduce travel costs of Federal agencies by 20 percent. We reduce Federal printing costs by $1 billion by 2015. We reduce the number of contractors, which we have previously described. The House Republican plan on revenue is really almost impossible to believe. In a circumstance in which we have record debt, in a circumstance in which the revenue of this country is the lowest it has been in 60 years, what is part of their answer? Cut taxes some more, and cut them for the very wealthiest among us, cut them another $1 trillion for those who are the most fortunate among us. I am not making this up. This is the House Republican plan: Take a circumstance in which we have record debt, the lowest revenue we have had in 60 years, and cut taxes for the very wealthiest among us by another $1 trillion by extending the top rate cuts, by a $5 million estate tax exemption. They actually cut revenues $4.2 trillion below the CBO baseline. Let me repeat that. They actually cut revenue in their plan $4.2 trillion below the Congressional Budget Office baseline. That is inexplicable. Maybe we can start to understand it when we look at what a former Reagan economic adviser said about the House Republican plan. Mr. Bartlett said this: Distributionally, the Ryan plan---- The House Republican plan---- is a monstrosity. The rich would receive huge tax cuts while the social safety net would be shredded to pay for them. Even as an opening bid to begin budget negotiations with the Democrats, the Ryan plan cannot be taken seriously. It is less of a wish list than a fairy tale utterly disconnected from the real world, backed up by make-believe numbers and unreasonable assumptions. Ryan's plan isn't even an act of courage; it's just pandering to the Tea Party. A real act of courage would have been for him to admit, as all serious budget analysts know, that revenues will have to rise well above 19 percent of [gross domestic product] to stabilize the debt. Revenue today is 14.8 percent of GDP--again, the lowest it has been in 60 years. If we look at the last five times the budget has been balanced in the last 50 years, here is what we see: Revenues had to be close to 20 percent of GDP. They were 19.7 percent in 1969, 19.9 percent in 1998, 19.8 percent in 1999, 20.6 percent in the year 2000, and 19.5 percent in 2001. That is the last five times the budget has been balanced. Each of those times, revenue was close to 20 percent of GDP. Now it is 14.8 percent of GDP. Anyone who seriously argues that you can solve this problem just on the spending side of the equation is not being serious. The budget framework we offer today has revenues at 19.5 percent of GDP--almost equivalent to what it was during the Clinton years, when we had balanced budgets and, in fact, stopped using Social Security money to pay other bills. During the Clinton years, revenue averaged 19.4 percent of GDP. Under our plan, it averages 19.5 percent. So revenue is clearly not out of line compared to the other times we balanced the budget and, in fact, during the Clinton years when we had the longest economic expansion in this Nation's history. For our colleagues who say, oh, you can't touch revenue or you will kill the economy, you will kill job creation--really? How about the historic record? The historic record shows very clearly that during the Clinton years, when you had revenue at the same level as we have in this plan, you had the longest economic expansion in this Nation's history--39 quarters; 32 of those quarters during the Clinton years-- the longest uninterrupted period of economic growth in this Nation's history, and you had revenue at the same level we are talking about in this plan. Facts are stubborn things. A previous President said that. He was right. The fact is, we had the longest period of uninterrupted growth in our economy during a period in which revenue was at the level we are proposing in this budget. That is a fact. Mr. President, the proposals in the budget framework also seek to bring us transparency. We have tax reform that simplifies the Tax Code, scales back tax loopholes, protects the middle class, improves progressivity and fairness of the code, promotes economic growth and U.S. competitiveness--because we lower the corporate rate from 35 percent to 29 percent to make America more competitive, and we pay for it by closing corporate loopholes. We also address the tax gap, offshore tax havens, and abusive tax shelters, and ensure that corporations pay their fair share. The specifics of our revenue proposal are as follows: The tax cuts-- the so-called Bush-era tax cuts--are extended for singles earning up to $500,000 a year and for couples earning up to $1 million a year. So 99 percent of the American people will see no rate increase--none; 99 percent of the American people will see no rate increase. One percent will, and it will be those who are sufficiently fortunate to be earning over $1 million a year--the top 1 percent in this country. We ask them to go back to rates of the Clinton era, when the top rate was 39.6 percent, capital gains were 20 percent. Those are the rates that pertain--when we had the longest economic expansion in our Nation's history. For those who say it is a job killer, they have to explain how that can be since history shows something quite different from their claim. We also provide for alternative minimum tax relief. That costs $1.5 trillion. That is not a tax increase. We are lowering taxes that would be imposed by the alternative minimum tax, which is increasingly gobbling up middle-class taxpayers. We are preventing that from happening. It costs $1.5 trillion to fix. So we are replacing that revenue with other revenue. I don't consider that a tax increase. That is merely substituting revenue for revenue that we are subtracting to prevent middle-class people from being caught up in the alternative minimum tax. We also reform the estate tax, going back to the 2009 levels which are $3.5 million a person and $7 million a couple. That means well over 99.5 percent of estates would be completely exempt. That is a fair plan. We also assume net $2 trillion of additional funds from closing tax loopholes, cutting tax subsidies, promoting tax fairness. That is over 10 years. We assume tax preferences for individuals are reduced 9 to 17 percent, depending on the amount of offshore tax havens and abusive tax shelters that are closed. We assume, as I indicated earlier, that the corporate rate is lowered to 29 percent, offset by reducing corporate tax expenditures and closing corporate tax loopholes--specific policies to be determined by the Finance Committee, as they always are. Mr. President, when I indicate there is a range for reducing tax expenditures from 9 to 17 percent, depending on how much savings we get out of offshore tax havens, here is the math. Over the next 10 years, the tax preferences--or expenditures, as they are sometimes called-- will cost the Treasury $14 trillion. Let me repeat that. The loopholes, the exclusions, the preferences in the Tax Code will cost the Treasury $14 trillion over the next 10 years. On top of that, offshore tax havens and abusive tax shelters will cost the Treasury another $1.4 trillion. That is according to estimates based on data from the Permanent Subcommittee on Investigations. So if we recover nothing from tax havens, to reach our revenue numbers we would have to reduce tax expenditures 17 percent. On the other hand, if we recover 80 percent of tax haven losses and tax shelter losses, the reduction in tax expenditures would only have to be 9 percent--17 percent reduction in tax expenditures if we get no savings from tax havens and tax shelters, and a 9-percent reduction in tax expenditures if we recover 80 percent of the losses from tax havens and tax shelters. Probably, the realistic expectation ought to be somewhere in between those extremes. If the CBO scored the proposal by Senate Budget Committee Democrats, they would not say there is any tax increase here at all. Let me repeat that. If the Congressional Budget Office scored this proposal by Senate Budget Committee Democrats, they would say there is a $765 billion tax cut over 10 years. How can that be? How can I be saying there is $2 trillion of additional revenue over 10 years, and the Congressional Budget Office would say--if they evaluated this plan by Budget Committee Democrats--they would say it is a $765 billion tax cut? The reason is simple. In our plan we extend all of the middle-class tax cuts. In addition, we actually broaden the middle-class tax cuts so that nobody is affected by a rate increase unless they are a couple earning over $1 million a year. We also provide the alternative minimum tax relief to prevent millions of middle-class people from being affected by that law. As I indicated earlier, that costs $1.5 trillion over the next 10 years to shield middle-class taxpayers from that. Third, we provide estate tax reform at the 2009 levels so that well over 99 percent of estates are completely shielded or exempt. Again, when our Republican colleagues say--and some of them do--you can't have a higher tax rate, even on those earning over $1 million, it will kill the economy--really? How about looking at the facts. How about looking at the historic record. How about being informed by what has actually happened before because when we look at history, we find quite a different answer than our friends on the other side are providing. What we find is that the last time the top rate for those earning $1 million was 39.6 percent, we experienced the longest period of uninterrupted economic growth in U.S. history. That is a fact. We had 39 quarters of economic growth from 1991 to 2000. For 32 of those quarters, Bill Clinton was President, and we had a top rate of 39.6 percent on those couples earning over $1 million a year. Our friends on the other side say: You will kill jobs. Do you know what is fascinating? I remember this debate back when we passed deficit reduction under President Clinton. Our friends on the other side said the same thing then. I remember, I was seated here listening to the then-Republican leader claim that if we passed the Clinton plan to get the deficit down and balance the budget, we would crater the economy. Those were the exact words our friends on the other side used at that time--that if we raised rates on the wealthiest among us, it would crater the economy. What happened? Not only did we not crater the economy, we had the longest period of economic expansion in our Nation's history, and 24 million jobs were created--the best record ever. That is the fact. That is what really happened--not some fairy tale about what happens if we get the country back on track, if we move toward balancing the budget, toward getting the debt down, because that is in fact what happened during the Clinton years. Yes, we had the highest rate of 39.6 percent on those earning over $1 million. But it didn't crater the economy--no. The economy grew. We had the longest economic expansion in this Nation's history, and 24 million jobs were created during that period, the best record ever. Let's look again at history. The last five times economic growth was above 4 percent in this country, the top tax rate was 39.6 percent on those earning over $1 million. Facts. Facts are stubborn things. In 1994, the top rate was 39.6 percent and the growth rate was 4.1 percent. In 1997, the top rate was 39.6 percent and economic growth was 4.5 percent. In 1998, we had 4.4 percent economic growth. In 1999, it was 4.8 percent. In 2000, we had 4.1 percent economic growth--the strongest economic growth, going back decades, in every year. The top rate on people earning over $1 million was 39.6 percent, which is precisely what we are proposing in this plan. Mr. President, I think it is undisputed by serious economists, of whatever philosophical stripe, that these tax expenditures have to be reined in. We are spending $1.1 trillion a year on tax expenditures. Some of the most conservative economists in the country have said that is just spending by a different name. Here is Martin Feldstein, professor of economics at Harvard, Chairman of the Council of Economic Advisers under President Reagan. He has written a column called ``The Tax Expenditure Solution for Our National Debt.'' He said this: Cutting tax expenditures is really the best way to reduce government spending. . . . It is called revenue, but it is really spending. Eliminating tax expenditures does not increase marginal tax rates or reduce the reward for saving, investment or risk- taking. It would also increase overall economic efficiency by removing incentives that distort private spending decisions. And eliminating or consolidating the large number of overlapping tax-based subsidies would also greatly simplify tax filing. In short, cutting tax expenditures is not at all like other ways of raising revenue. This is from the head of the economic advisers under President Reagan, saying we ought to cut tax expenditures. That is exactly what the Senate Democratic budget plan does. We cut tax expenditures 9 to 17 percent, depending on how much we are able to save from closing off these offshore tax havens and the abusive tax shelters. If we get no savings from tax havens and tax shelters, then we would have to reduce tax expenditures 17 percent. If we are able to reduce tax havens and the other loopholes, offshore loopholes--the abusive tax shelters--by 80 percent, then we would be able to reduce tax expenditures by 9 percent. Just like Martin Feldstein who said we ought to have after tax expenditures, also Alan Greenspan, former Chairman of the Federal Reserve, said this: I think that Republicans are out to identify a very significant amount of so-called tax expenditures, which in fact are misclassified. They are expenditures, they are outlays, and many are subsidies, and subsidies are not the type of thing that you want for an efficient market system. There are a lot of them. Mr. President, that is what we are proposing. Let's go after these subsidies, these preferences, these exclusions. While we are at it, let's go after offshore tax havens, abusive tax shelters. Let's shut them down. If there is any doubt about where this money is going, here it is: 26.5 percent of tax expenditures go to the top 1 percent in this country; 26.5 percent of all tax expenditures go to the top 1 percent. So when we are saying we may have to reduce tax expenditures 17 percent, we could do it all just with the top 1 percent. That is where the benefit is going. Let me show you in another way. The top 1 percent, in dollar terms-- the value, on average, of tax expenditures for those who are in the top 1 percent in this country, earning an average of $1.1 million a year, they get, on average, a benefit every year from tax expenditures of over $205,000. For those who are in the middle quintile, those earning $39,000 a year, their average benefit is $3,000. You can see that the top 1 percent have a benefit from tax expenditures that is 66 times what people in the middle get. It is not unfair to go to those who have had the greatest benefit from the national economy over the last two decades and say to them: We need you to help a little bit more to get out of this debt rut we are in. And you know what, that is not unfair because they have had the greatest benefit over the last 15 years. Here is something that I think shows it conclusively. This is the effective tax rate for the 400 wealthiest taxpayers in America. In 1992, it was about 27 percent. In 1995, the tax rate for the wealthiest 400 was 30 percent--29.9, to be exact. Look what has happened since 1995. The effective tax rate for the wealthiest 400 taxpayers in America has gone down to 16.6 percent. They have had their tax rates cut almost in half. Has anybody else had their taxes cut in half? I don't think so. The people who have had their taxes cut in half are the wealthiest among us. So it is not unreasonable to go back to them and say: Hey, wait a minute. We have to go back to what the tax rates were here--not back to an effective rate of 30 percent but a top rate that we had in the Clinton years when we had the largest economic and longest economic expansion in our Nation's history. That seems reasonable. We also know it is not just on the individual side but on the corporate side as well. This is a little five-story building in the Cayman Islands. Now, 18,857 companies say they are doing business out of this little building. Anybody believe that? Anybody believe 18,857 companies are doing business out of this little 5-story building down in the Cayman Islands? I would say that is the most efficient building in the world. Imagine, a little 5-story building, and 18,857 companies say they are doing business out of there. They have maybe 100 employees in that building. Those are the most efficient people in the entire world. Unbelievable what they are doing. You know what, they are not doing business; they are doing monkey business because what they are doing is cheating all the rest of us who pay what we owe. Why are they down in the Cayman Islands, those 18,857 companies, calling that little building home? Because there are no taxes down in the Cayman Islands, and they are showing their profits in subsidiaries they say are operating out of that little building so they can avoid paying the taxes the vast majority of us pay right here in the United States. That is outrageous. That is unfair. Our Republican friends say: Oh, you can't touch that; it is a tax increase if you do. Really? That is a tax increase? I don't think so. Offshore tax haven abuse is proliferating. If anybody doubts it, go Google offshore tax havens and see what happens. See what happens if you Google offshore tax havens. The experts here on the Permanent Subcommittee on Investigations have said this: Experts have estimated that the total loss to the Treasury from offshore tax evasion alone approaches $100 billion per year, including $40 billion to $70 billion from individuals and another $30 billion from corporations engaging in offshore tax evasion. Abusive tax shelters add tens of billions of dollars more. The Democrats on the Budget Committee said: We have had it. We are going after those people. We are going to insist they pay their fair share just as the vast majority of Americans already do. So we are saying: We are coming after you. If you have a tax haven down in the Cayman Islands, we are coming after you. If you have an abusive tax shelter, we are coming after you because it is not fair to all the rest of us who are paying what we owe. There are critical priorities that shouldn't be cut. One is education. Education is the foundation for future economic strength. An educated population is a key source of economic growth. . . . Broad access to education was, by and large, a major factor in the United States' economic dominance in the 20th Century and in the creation of a broad middle class. Indeed, the American Dream of upward mobility both within and across generations has been tied to access to education. This is a quote from Harvard economists Claudia Goldin and Lawrence Katz in ``The Future of Inequality: The Other Reason Education Matters So Much.'' When we see what our friends on the other side are doing, they are cutting education 15 percent. We don't believe that is the right priority for the country. Yes, overall spending has to be cut. We do cut spending--almost $2 trillion in the Democratic blueprint, almost $2 trillion--but not education. Another key priority is energy. We all know what has happened to gas prices. They have soared from $1.81 in December of 2008 to over $3.50 a gallon by July 4. I just paid $3.77. We all know what is happening to gas prices. Many of us believe a key priority is to reduce our dependence on foreign energy. House Republicans have a different idea. They cut the programs to reduce our dependence on foreign energy by 57 percent. We reject that proposal. We don't think it is in the national interest. Infrastructure--roads, bridges, airports, rail. Here is what the U.S. Chamber of Commerce has said about infrastructure spending: If we don't change course over the next five years, the economy could forgo as much as $336 billion in lost economic growth as transportation networks continue to deteriorate. I am well aware of the fiscal constraints facing this Congress and the nation. But we must avoid cutting off our nose to spite our face. Without proper investment and attention to our infrastructure, the United States' economic stability, potential for job growth, global competitiveness, and quality of life are all at risk. That is a quote from Thomas Donohue, the president and CEO of the U.S. Chamber of Commerce. Republicans in the House weren't listening because they propose cutting transportation funding in their budget by 30 percent. We reject that cut as well. It does not make sense to cut education, to cut infrastructure. It does not make sense. It will only weaken our position. On health care, the House Republican plan ends Medicare as we know it. It replaces it with a voucher system, block grants Medicaid, and shifts costs on seniors, children, the disabled, and individual States. It ends the countercyclical nature of Medicaid, and it defunds health care reform, increasing the number of uninsured by at least 34 million people in this country. The House Republicans have said their plan saves Medicare. I don't think so. I think it kills Medicare. Why do I say that? Because under traditional Medicare now, the beneficiary pays 25 percent. Someone who is eligible for Medicare pays 25 percent of the bill. Under the House Republican plan, they would pay 68 percent of the bill. That just stands things on their head. Instead of people having Medicare as a social safety net when they get to their senior years, they would have it pulled out from under them. We have rejected the House GOP approach and would remind our colleagues that we have had large health care savings that were already enacted last year in health care reform. The Congressional Budget Office says that will save in the second 10 years $1.3 trillion. So, yes, everything has to be on the table, but we just took a big run at getting our health care costs back in line--$1.3 trillion in deficit savings, according to CBO. In conclusion, the overview of the budget framework we are offering our colleagues for their consideration provides $4 trillion in deficit reduction over 10 years. It is actually $5 trillion if measured on the same basis as the fiscal commission. We have adopted what we think is a more plausible baseline in light of things that have happened over this year. It stabilizes the debt by 2014 and cuts the deficit to 2\1/2\ percent of GDP by 2015 and 1.3 percent by 2021. We have tax reform that simplifies the code. This closes loopholes and goes after offshore tax havens and abusive tax shelters and restores fairness. We reject the House GOP plan to end Medicare as we know it. We protect education, energy, and infrastructure investments. And we have a balanced deficit and debt reduction plan, cutting spending by about $2 trillion and providing additional revenue by about $2 trillion. Let me conclude as I began by saying that our revenue plan would be scored by the Congressional Budget Office as being a $765 billion tax cut because we are replacing revenue lost by extending other tax cuts. We are extending all the middle-class tax cuts and expanding middle- class tax cuts up to those earning $1 million a year. And we are fixing the alternative minimum tax. That costs $1.5 trillion over 10 years. I don't consider that a tax increase at all because you are reducing revenue that would otherwise come into the Treasury under the alternative minimum tax--which I think almost all of us think is unfair--and replacing it with revenue by reducing tax expenditures. Even the most conservative economists in the country say that needs to be done. That is the blueprint the Senate Budget Committee Democrats are laying before our colleagues. We are under no illusions. We know this is a year in which the normal process is not being followed. We understand there are leadership negotiations at the highest level, so we understand this is not going to be dealt with in the normal course of doing business. We understand there is leadership negotiation, but we believe there are some ideas in this package that deserve consideration as those negotiations go forward. Mr. President, I thank my colleagues for their courtesy and their patience, and I look forward to this continuing debate as we take on the debt threat that looms over our Nation. I thank the Chair, and I yield the floor.

Mr. CONRAD

Mr. CONRAD. Mr. President, I thank the Senator from Colorado for his remarks and for his leadership. He has been right on point with respect to what has to be done in this country to get the debt threat under control. Make no mistake, we do face a debt threat of ominous proportions. Yesterday, the Congressional Budget Office again warned us: ``Debt crisis looms absent major policy changes.'' You go to the end of this article that was from the Associated Press, by Mr. Andrew Taylor, a respected writer, and it says: CBO says the debt increases the probability of a fiscal crisis in which investors lose faith in U.S. bonds and force policymakers to make drastic spending cuts or tax hikes. That is where we are headed if we do not respond. And it is going to require a bipartisan response with Republicans and Democrats, because Republicans control the House of Representatives, Democrats control the Senate, and there is a Democratic White House. So when Republicans--as I just heard on this floor--blame it all on the President, that is not going to work. That is not going to work, because Republicans can block anything in this Chamber, and Republicans control the House of Representatives. So guess what. They are going to have to join Democrats and be responsible. And being responsible means doing some things that are tough. Republicans and Democrats are going to have to do some things that are tough. Why? Because we are borrowing 40 cents of every dollar we spend. That cannot be continued much longer. If you look at the historic relationship between spending and revenue, here it is, as shown on this chart, going back to 1950. The red line is the spending line. The green line is the revenue line. What you see is spending as a share of national income is the highest it has been in 60 years. Revenue is the lowest it has been in 60 years. When I hear my Republican friends say this is just a spending problem, they have it half right. It is in part a spending problem. Spending is the highest it has been in 60 years--or very close to it. But revenue is the lowest it has been in 60 years. So let's get real. Let's get honest. This is a spending problem and a revenue problem. It is the difference between the two that leads to record deficits and a debt that is spiraling out of control. Here is what the head of our Armed Forces--Admiral Mike Mullen, the Chairman of the Joint Chiefs of Staff--said last year at about this time: Our national debt is our biggest national security threat. Colleagues, are you listening? Are you listening? We are moving at warp speed toward a fiscal crisis. Nobody can tell us when it will happen. What everyone is telling us is that it will happen. Here is where we are, as shown on this chart. This is the gross debt of the United States. We are now, at the end of this year, going to be over 100 percent of our gross domestic product. That is going to be the gross debt of the United States--all the bills we owe. The black line shown on the chart is the 90-percent threshold line. Why does that matter? Because we have just had the definitive economic study done on deficits and debt and economic growth. It was done by Professor Carmen Reinhart at the University of Maryland--she is no longer there; she was at the University of Maryland--and Professor Ken Rogoff at Harvard. Here is what they concluded: We examine the experience of 44 countries spanning up to two centuries of data on central government debt, inflation and growth. Our main finding is that across both advanced countries and emerging markets, high debt/GDP levels (90 percent and above) are associated with notably lower growth outcomes [for the future]. This is not just about numbers on a page. This is about the future economic prospects of our Nation. A failure to act will consign us to a more limited future. Fewer jobs, less economic growth, less economic activity, a weaker position for the United States in the world--that is where we are headed. We have been warned repeatedly. Quoting from the Wall Street Journal: ``S&P''--the major rating agency--``Signals Top Credit Rating Is in Danger, Stoking Political Battle on Deficit.'' ``U.S. Warned on Debt Load.'' So nobody in this Chamber, nobody across the Capitol in the House of Representatives, can claim they did not know what was coming. We have been warned, and we have been warned repeatedly. What happens if we do not act and there is a reaction in the interest rate environment for the U.S. debt? I would remind my colleagues, a 1- percentage point increase in interest rates will add $1.3 trillion to the debt over the next 10 years. A 1-percentage point change in interest rates will add $1.3 trillion to the debt over the next 10 years. People say: Well, we are not going to extend the debt, we are not going to extend the debt limit of the United States. Do you know what happens? The creditors say: Oh, really? Well, we are not going to lend you more money then. Do you know what happens then? Interest rates go up in order to attract other lenders. And what happens? Every 1- percentage point increase in the interest rates adds $1.3 trillion to the debt in just 10 years. Here are the remarks of 10 of the previous chairs of the President's Council of Economic Advisers. Headline: ``Unsustainable Budget Threatens Nation.'' This is their conclusion, the top economic advisers to former Presidents, Democrats and Republicans. The previous 10 unanimously said this: There are many issues on which we don't agree. Yet we find ourselves in remarkable unanimity about the long-run federal budget deficit: It is a severe threat that calls for serious and prompt attention. . . . We all strongly support prompt consideration of the Fiscal Commission's proposals. The unsustainable long-run budget outlook is a growing threat to our well-being. Further stalemate and inaction would be irresponsible. I served on that commission. There were 18 of us. Eleven of us agreed to the recommendations--five Democrats, five Republicans, and one Independent. That proposal would reduce the debt from what it would otherwise be by $4 trillion. Mr. President, 5 Democrats, 5 Republicans, and 1 Independent--11 of the 18 agreed to support the recommendations. We cut spending. We cut domestic nondefense spending. We cut defense spending. We took on the entitlements. And, yes, we raised revenue by $1 trillion over the next 10 years--not by raising tax rates. In fact, we cut tax rates. But we still got more revenue because we expanded the tax base by reducing tax expenditures that are now running $1.1 trillion a year. Over the next 10 years, the tax expenditures of this country are going to be $15 trillion. Let me repeat that. The tax expenditures in this country over the next 10 years--special loopholes, deductions, exclusions, all the gimmicks that are in the Code--$15 trillion. Not only did the Fiscal Commission come up with a recommendation of about $4 trillion, almost every other group that has made a recommendation has called for debt reduction of about $4 trillion over the next 10 years from what it would otherwise be: the Fiscal Commission, the Bipartisan Policy Center, the American Enterprise Institute, the Center for American Progress, the Heritage Foundation, the Roosevelt Institute--all of them saying we need to get this debt down. Here is where we are headed, according to the Congressional Budget Office. This is not the gross debt. This is the publicly held debt. It is headed for 233 percent of the gross domestic product of the country if we fail to act. If, instead, we would adopt the commission proposal, you can see, as shown on this chart, we would actually work the debt down, the publicly held debt, to 30 percent of GDP. Every part of the budget has to be scrutinized and has to generate savings. Here is what has happened to defense spending since 1997. It has gone straight up, from $254 billion a year to $688 billion a year. Secretary of Defense Gates said this: [T]he budget of the Pentagon almost doubled during the last decade. But our capabilities didn't particularly expand. A lot of that money went into infrastructure and overhead and, frankly, I think a culture that had an open checkbook. I think he got it right. When we look at this growing debt, where did it come from? The Washington Post had this report on May 1: The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That's nearly half of the $12.7 trillion swing from projected surpluses to real debt. If we look back on the five times we have balanced the budget in the last 40 years, revenue has been close to 20 percent of GDP: 19.7 in 1969; 19.9 in 1998; 19.8 in 1999; 20.6 in 2000; 19.5 in 2001. Where is revenue today? It is 14.8 percent of GDP. And our friends across the aisle say it is only a spending problem. Let's get real. It is a spending problem and it is a revenue problem. Let's be honest with the American people. Martin Feldstein, the distinguished conservative economist, said this: Cutting tax expenditures is really the best way to reduce government spending . . . [E]liminating tax expenditures does not increase marginal tax rates or reduce the reward for saving, investment or risk-taking. It would also increase overall economic efficiency by removing incentives that distort private spending decisions. And eliminating or consolidating the large number of overlapping tax-based subsidies would also greatly simplify tax filing. In short, cutting tax expenditures is not at all like other ways of raising revenue. Mr. Bernanke, the Chairman of the Federal Reserve, has said this, and I will conclude on this point: Acting now to develop a credible program to reduce future deficits would not only enhance economic growth and stability in the long run, but could also yield substantial near-term benefits in terms of lower long-term interest rates and increased consumer and business confidence. This is a defining moment for our country. We can either continue to run head-long toward a debt crisis, or we can join together, Republicans and Democrats, in a comprehensive plan to get our debt under control. That will require a comprehensive plan, one that addresses spending--spending must be reduced. But it needs to be reduced when this economy is stronger. That is what every one of the bipartisan commissions has concluded. Yes, spending has to be cut, but not right this minute. It has to be part of a plan that assures it will be cut, and it has to be every part of spending: domestic discretionary spending, defense spending--yes, the entitlements have to be right- sized and we have to have the additional revenue given the fact, the simple fact, that revenue is the lowest it has been in 60 years as a share of our GDP, far lower than it has been in every one of the 5 years we have balanced the budget out of the last 40. I urge my colleagues on both sides, now is the time for principled compromise. Now is the time to come together to put in place a plan that deals with this debt threat, fundamentally and assuredly. We have that opportunity. We should not let this opportunity slip by. I yield the floor.

Mr. CONRAD

Mr. CONRAD. Madam President, I ask unanimous consent that morning business be extended until 12:30 p.m., with Senators permitted to speak therein for up to 10 minutes each.

Mr. CONRAD. Madam President, I am going to put in a quorum call at this moment, but then I am going to ask to be given time to speak on a dire emergency facing my State. I suggest the absence of a quorum.

Mr. CONRAD. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. CONRAD. Madam President, I ask unanimous consent to use such time as I might consume.